Marking a major milestone in India’s financial history, the State Bank of India (SBI) became the first Indian bank to launch a merchant banking subsidiary, setting the foundation for investment banking in the country.
The subsidiary, later known as SBI Capital Markets Ltd., was established in 1972 with the goal of offering specialized financial services such as issue management, corporate advisory, project financing, capital raising, and investment consultancy — services that were previously unavailable or underdeveloped in India’s banking sector.
“With this step, SBI not only expanded its financial portfolio but also helped pave the way for a modern capital market ecosystem in India,” said a senior banking analyst.
Merchant banking differs from traditional commercial banking in that it focuses on corporate clients and capital market instruments, offering support for initial public offerings (IPOs), mergers & acquisitions, and infrastructure project funding.
- Initiative: Merchant Banking Subsidiary
- Launched by: State Bank of India (SBI)
- Year: 1972
- Subsidiary Name: SBI Capital Markets Ltd.
- Significance: First of its kind by any Indian bank
The success of SBI’s merchant banking arm encouraged other major Indian banks, including ICICI, IDBI, and Bank of Baroda, to follow suit — giving rise to a new era of financial advisory and capital market development in India.
Today, SBI Capital Markets remains a key player in the sector, providing financial solutions for large-scale infrastructure, energy, and industrial projects — upholding SBI’s legacy of innovation in Indian banking.
